Union Bank’s directors to Japanese parent: Raise your offer
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The takeover fight between Union Bank and its Japanese corporate parent is getting nastier.
San Francisco-based UnionBanCal Corp., the holding company for $60-billion-asset Union Bank, today rejected the latest buyout offer from Mitsubishi UFJ Financial Group, the California bank’s longtime controlling shareholder.
A special committee of UnionBanCal’s independent directors said the $63-a-share offer, which Mitsubishi announced Tuesday, ‘substantially undervalues UnionBanCal and is not in the best interests of UnionBanCal’s minority stockholders.’
Mitsubishi, which owns Bank of Tokyo, has owned 65% of UnionBanCal for years. Now it wants the remaining 35% as a first step toward further expansion in the U.S. banking industry, as noted in this post from Tuesday.
The two sides began talks in spring. But after UnionBanCal’s independent directors in late June nixed Mitsubishi’s first offer -- for $58 a share -- the Japanese company decided this week to go straight to shareholders with a tender offer it plans to launch Monday.
It isn’t a surprise that UnionBanCal wants a higher price. But in rejecting the latest offer, the directors’ committee basically accused Mitsubishi of lying. In a statement today, the directors said that Mitsubishi’s ‘assertions regarding the special committee’s posture in its evaluation of the initial [buyout] proposal are not accurate.’
The directors said that ‘we made clear that we would carefully consider any revised proposal delivered by [Mitsubishi] but none was received prior to’ the tender offer announcement Tuesday. ‘We have been and remain willing to engage in discussions,’ they said.
No response yet from Mitsubishi.
UnionBanCal shares slipped 50 cents to $65 before the directors’ announcement.
This seems to be a day for California companies to reject their foreign parents’ wishes: South San Francisco-based Genentech Inc. told Swiss drug giant Roche Holding that its $89-a-share buyout offer was too low. Roche, which controls 56% of Genentech, made the bid last month.